Motorola Adds To Layoffs, Revises Q3 Sales To Flat

SCHAUMBURG, ILL.— The ongoing slump in the telecommunications business has forced Motorola to announce plans to eliminate by the end of the year about 2,000 additional jobs worldwide. This brings the total number of company-wide workforce reductions to 32,000 since last December, more than 20 percent of its employees.

The cuts will come from Motorola's Global Telecom Solutions Sector (GTSS), which handles cellular phone network development and manufacturing, with facilities in the United States and worldwide. The company specifically blamed slower growth in the wireless infrastructure market, resulting from delays in capital expenditures by wireless service providers. This is expected to lead to more aggressive cost reduction efforts in its GTSS.

Motorola expects sales in the third quarter to be flat vs. the second quarter, rather than up 5 percent as the company had anticipated earlier. However, Motorola expects to report a smaller loss in the third quarter, including pro forma adjustments, compared with the second quarter of 2001. This will be the company's fourth straight money-losing quarter.

Citing increased sales and improved profitability in its cellphone division, Robert L. Growney, president and chief operating officer, said, "The improvement in the operating loss sequentially from the second quarter is attributable to increased sales and improved profitability in our Personnel Communications Sector and Commercial, Government and Industrial Systems Sector. All other segments of the company are expected to experience sequential declines in sales and profitability."